The long wait for the next job

Canada has more than regained the jobs lost in the recession, but the average time out of work remains at a 10-year high, something that could cost the economy in the long term.

From the time employment peaked in October 2008 until July 2009, Canada lost 417,000 jobs.

By July 2010, it had made that back and even gained another 9,000 — although a much greater proportion of the new jobs were part time. Since then, job growth has been flat.

"Full-time employment has not recovered," Vincent Ferrao, an analyst with Statistics Canada's Labour Statistics Division, told CBC News. "It's still below what it was."

More troubling is that the average duration of unemployment nationally was 19.4 weeks as of October, down only slightly from the 19.9 weeks a year earlier.

And whether it's Ontario's manufacturing-focused economy, or Alberta's resource-based sector, the average amount of time spent jobless is still well above its pre-recession level (see graph).

When employment peaked two years ago, the national average was 15.7 weeks. In Alberta, with its labour shortage then, it went as low as seven weeks.

Ferrao said one reason for unemployment duration still being high could be that as the economy improves, more people resume searching for work and their time without a job extends the overall average.

That duration is highest in Ontario, at 22.8 weeks, underscoring how severely manufacturing has been hit by the downturn, Ferrao said. The sector "hasn't really come back."

And it may never, according to Todd Hirsch, senior economist with Edmonton-based ATB Financial.

Hirsch sees the long gaps without work as a symptom of the North American economy's transition from manufacturing and construction to valued-added service industries, such as information technology.

"There's a bit of a mismatch between some of those workers' skills and the jobs that are available," he said.

"As hard as it to accept, a lot of those jobs aren't going to be coming back … and if those jobs aren't coming back, those people are looking at a long duration of unemployment."

For someone unemployed, a longer time out of work compounds the problem of getting back into the workforce.

"Your skills start to atrophy," Hirsch said. "You start to become left behind. You're not up to date with the new systems that a company might be using in computer systems or whatever.

"You also start to lose your social and professional connections within the industry."

Two years can be a tipping point, Hirsch said.

"It's very difficult to integrate back into the workforce after you've been out of the job market involuntarily for that long.

"For a lot of those manufacturing workers … in their 50s or early 60s, going back for retraining into something brand new sounds good, but in a practical sense it's really, really, difficult for mature workers or people who may have only five years or 10 years left before they were hoping to retire."

The personal losses, as well as the added burden on social assistance programs, are bad enough, but the economic loss for the country is also a problem.

"If you start to lose people from the job market, from the workforce, that's a loss to the economy," Hirsch said.

"These are formerly productive people. They earned money and paid taxes, but if they're not able to integrate back into the workforce, it's a huge loss on the economy and on society."